Personal Finance

Post Offices have helped many citizens develop investment habits. In this blog post, we look specifically at the post office schemes for a boy child. We will specifically discuss ‘Ponmagan Podhuvaippu Nidhi’ and how other post schemes can be used for the boy child.

Indian Post offices have existed for a very long period. The post office has been the oldest organization which has helped the Indian citizen to cultivate and nurture the saving and investment habits. Indian Post office during the past few decades has provided many saving schemes to their account holders.

The post office offers specific girl child saving scheme offered named “Sukanya Samriddhi Yojana”. But there is no much male child saving scheme introduced in the market by post offices.

After many appeals from masses, TamilNadu post offices have released male child saving scheme called as “Ponmagan Podhuvaippu Nidhi”. The ‘Ponmagan Podhuvaippu Nidhi’ was launched during September 2015. This scheme encourages parents to open an account in the name of their male children.

Ponmagan Podhuvaippu Nidhi Scheme details:

The Ponmagan Podhuvaippu Nidhi can be opened any time before the boy child attains the age of 10 years.

The minimum contribution to be made each year is Rs.500, whereas the depositor parents can contribute maximum up to Rs.1.5 lakh under this scheme. A depositor can make a contribution only 12 number of times in a year (Any number of times but the maximum contribution of Rs.1.5 Lakh cannot be exceeded.

The rate of interest is decided annually based on market condition and government policies. The current ongoing interest is 8.70 per cent.

Any contribution made under this scheme, an individual can claim tax benefit and deduction up to a limit of Rs.1.5 Lakh in a year under the section 80C of Income tax act. Along with the invested amount, any interest earned on the investment (except for the interest earned in last year) can also be claimed as a tax deduction under section 80C up to an overall limit of Rs.1.5 Lac.

The depositor parent can pledge the scheme and obtain a loan for the period. This loan facility is available only after the 4 years from the date of account opening.

The above-said scheme is only applicable in TamilNadu and thus does not cover whole India.

So for other Indian citizens apart from people investing in TamilNadu post offices can save or investment under standard Post office saving scheme which allow investments in the name of minor as well. These standard Post Office Saving scheme are as:

National Savings Certificate (NSC) has been into the market since the early 1950s’. The NSC during the beginning was issued with an intention to raise money for helping the development of India. The transition of NSC from fund generating investment scheme to tax saving investment scheme was much later. The NSC accounts can be opened in the name of the minor male child by their parents or legal guardian.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP) for a very long time has been a very popular investment scheme amongst lower and middle-income earners. The KVP scheme was first introduced in 1988 but was discontinued in 2011. But due to popular demands and request, the KVP was re-introduced in 2014. KVP is a government investment scheme wherein an individual can invest their saving in lump-sum and each year thereafter government pays interest at a predetermined rate. The parent or legal guardian can open KVP account on behalf of their minor male child.

The Public Provident Fund (PPF) Scheme was first launched in 1968. PPF is tax saving investment scheme wherein the interested individual investors’ invests their fund for 15 years. The individual also can claim income tax benefits for the amount invested under this scheme. The interested parents can open PPF account in the name of their male child.

Post Office Monthly Income Scheme (POMIS) is an investment option that ensures that the investor would receive guaranteed monthly payment based on the investment amount made. MIS is said to be one of the safest options to invest funds as the investment and returns are government organized. POMIS can also be opened by a minor (individuals who have crossed 10 years of age but have not exceeded 18 years), with a condition that the minor opens a joint MIS account clubbing with a major guardian (individual whose age is more than 18 years).

Indian Post Office also offers their customers with an option to a 5-year recurring deposit (RD) account wherein the account holder can add their saving on monthly basis and earn fixed interest on same. The parent and minor male child can open the joint recurring deposit account.

Thus above are a few mentioned male child saving plans offered and managed by post offices. One can enroll themselves and their male child in any of the investment scheme based on their choices and capabilities.

How have you been saving for your boy child? Do let us know in comments and we are happy to discuss regarding the same !!

I have enquired 4 post offices in Madurai about Ponmagan scheme for boy child but everybody says there is no such scheme is introduced only PPF scheme is there. If anybody knows how to open the Ponmagan scheme account please let me know.

I have one daughter of 5 years and a son of 11 months. I have opened a sukanya samrudhi yojana in name of my daughter prior to 2 years, but I want to open a similar one in name of my son also, but there is no scope. TN is offering scheme for male child, but in one India, in rest part of there is no such scheme, is a matter of regret and tragedy. There should not be so such descriprancy in one nation, so far india post is concerned.

Hey Prajith have you looked at using mutual funds as an investment option to save for your child’s education or marriage. I believe they are better then any policy available in the market. Drop me a mail sarab@bodhik.com. If you need any help.